Department mulls carbon tax collection

The Excise Department plans to initially implement a carbon tax rate on refined oil equivalent to Singapore’s, according to the chief of the Excise Department.
Ekniti Nitithanprapas, director-general of the Excise Department, said the department would propose a ministerial regulation for carbon tax collection, which has already been endorsed by the Finance Ministry and is awaiting placement on the cabinet’s meeting agenda.
The tax will be collected at a rate of 200 baht per tonne of carbon, a rate that was similar to Singapore’s initial carbon tax when it became the first Asian nation to introduce this form of tax at S$5 per tonne of carbon. More recently, Singapore hiked the tax rate to S$25 (629 baht) per tonne of carbon.
Mr Ekniti clarified that the carbon tax will not affect the general public’s use of oil, as the oil excise tax rate remains unchanged.
For example, the current excise tax on oil is now 6.44 baht per litre, of which 45 satang per litre will be allocated as carbon tax. However, businesses that can reduce their carbon emissions will face a lower tax burden.
Thailand currently emits 372 million tonnes of carbon annually, with 70% of this coming from the energy and transportation sectors. Carbon emissions from the energy sector alone account for 37% of the country’s total emissions per year.
Thailand has committed to international agreements on reducing greenhouse gas emissions. By 2030, the country aims to reduce carbon emissions by 30-40% from current levels. By 2050 it targets carbon neutrality, and by 2065 it aims to achieve net-zero emissions.
The country is making progress towards these goals by promoting electric vehicles (EVs), which have already reduced carbon emissions by 341,000 tonnes.
Additionally, Mr Ekniti said the Excise Department, which aims to become an environmental, social and governance (ESG)-focused agency that prioritises environmental impact in addition to tax collection, is preparing to propose to the cabinet a 0% tax rate on bioethylene to help protect the environment. Bioethylene, derived from plants such as cassava, can be used to produce plastic pellets for environmentally friendly bioplastic products.
According to Mr Ekniti, the department also plans to propose a 0% excise tax on passenger vans that have been modified with facilities for disabled persons, supporting Thailand’s aged society.
In the past, the Excise Department introduced a sugar tax to improve public health. Beverages with sugar content above 14 grammes per litre are taxed at 5 baht, those with over 10 grammes taxed at 3 baht and those with over 8 grammes taxed at 1 baht.
Beverages with less than 6 grammes per litre are exempt. As a result, over the past 4-5 years, manufacturers have significantly reduced sugar levels, with the volume of beverages containing more than 14 grammes of sugar per litre dropping from 819 million litres to just 16 million litres.
In the first 11 months of the 2024 fiscal year, the Excise Department collected 482 billion baht in revenue, an increase of 10.6% compared to the same period last year, while the full-year target has been set at 520 billion baht. For the 2025 fiscal year, the department has been tasked with collecting 600 billion baht.